I’m starting a business, what has been my hobby for years where I occasionally did projects for friends, which turned into doing it for friend’s friends for very little, and now strangers for decent profit. I’m applying for a business liscense with my city (I was surprised, it’s only $30!), and a friend of mine who I have been training is working for me part time about 12 hours a week to help me keep up with my orders.
I find that googling “business” anything turns up some truly awful results, everyone is constantly trying to sell you some “system”. I’m 25 and my family doesn’t have any entrepreneurs I would consider successful, I don’t really have a mentor or a source for good advice, thus this thread.
I’m wondering if anyone could share any resource for a home business that is JUST starting… I know my product and services well, but how to run a business I am absolutely clueless. For example, I am in the process of registering my business with my city, and I also have a domain and a basic website up. What else do I need to be “above board”? How do I go about these…tax writeoffs? I don’t know the first thing about taxes, I always do the basic tax forms for my personal income, no idea at all how to do business taxes or how to keep track of my business earnings and spending. I do about 1,000-1500 dollars worth of business a month right now, which is only that low because I work fulltime and because you can’t currently order from my website, I sell my products direct through forums.
My goal is to quit my job sometime next year to work fulltime for myself. My job is a stable state job, but it is unskilled and I only take home 800 every two weeks after taxes and deductions for health and retirement. I live with roommates and pay for everything myself, so this is obviously a VERY modest lifestyle. It is KILLING me pulling 3 all nighters per week to work on my business, get 90 minutes of sleep, then drive 8 hours to work, all for chump change.
SoOOo, any advice people with more experience could point me out to or just shout at me would be much appreciated. I literally know nothing about business, and I am working out my garage until I can move somewhere later in the year with a bigger workspace.
Do you have a nearby university with a business school? They probably have a small business development center or something similar, and that’s a good place to start.
Do you have access to this resource? You may be able to get some good free advice from SCORE volunteers who have the knowledge and experience to help you.
I want to emphasize your smarts in getting this info NOW so that you can get set up right from the beginning. It doesn’t matter how good your service is - if you don’t learn to run the business side, you are not going to make it. Lack of bookkeeping, management, and/or taxes take down many, many small businesses.
You can check with your local Chamber of Commerce. They would have contacts in your local business community and might be able to find someone who’s willing to mentor you, help you find a good accountant, etc.
I don’t have the money for an accountant. I do have an ex who is an accountant I could probably ask for some basic help, what do you recommend is easy and not a big favor to ask her to help me do?
Also, should I absolutely start a seperate bank account just for my business? If so, what features should I shop around for in an account?
WOW thanks for that! I am in the Seattle area and they have a bunch of events upcoming that I am interested in! This is EXACTLY what I started this thread for, thank you thank you thank you.
If you can afford Quickbooks or whatever accounting software your ex knows (I don’t think you can afford not to get it) then she can help you get it all set up. Quickbooks and the Quickbooks forums can give you a lot of help. Some of the help you have to pay for like their Payroll services, which I think is the only way you can get Quickbooks to keep track of withholding and when to pay taxes. That is a yearly cost of like $300 I think. It’s invaluable to me.
You might be able to get all the info you need from Quickbooks forums and the small business group. But I don’t know how I’ve gotten anywhere without an accountant.
As for the bank account, I’m pretty sure the answer is “yes” but you would want to ask an accountant what’s the best type of business to set yourself up as, and go from there.
I would say if you can’t afford to get an accountant then you can’t afford to start a business. And I’m not taking $1000/mo retainer here I’m talking at least pay someone to answer questions for a few hours. But, I may be over-estimating my love for my accountant.
Oh I see. I could afford to talk to someone for a few hours, I don’t think I could pay someone monthly to look at my books though. Thank you very much.
I’m at a difficult place where my business is suffering because I work fulltime and can’t invest enough time into it, yet I am not at the point where I can quit my job either.
Then you don’t have the money to NOT get an accountant, or a lawyer as well. These professionals will cost money, that’s true, but in the end they will save you much more than they cost. “It’s easier to ask for forgiveness than to ask for permission” does NOT apply to law or taxes.
And yes, you need to set up a separate account for business use only.
You’re going to want a good accountant (get references!).
You don’t need them to do your monthly books. You do need them to help you get set up correctly (things like your questions about bank accounts and tax write-offs), and possibly help with your taxes at the end of the year. And ask the occasional question as you get up and going.
If you get things set up right, then you should be able to do your own books (with Quicken or equivalent). This will make preparing your taxes much easier/cheaper, too, since you’ll have everything in the right categories.
Everything said above is spot on. I would mention GnuCash, though, which is the open source analogue to Quickbooks.
I’m not sure what type of business you run, but if it’s a creative field - photography, design, mixing audio, game dev, what have you, I recommend StudioCloud. Really nice cloud based sall business management software with POS, CRM, scheduling, and lots more. And free (for the basic package) - I’ve not had any real need to consider the paid version yet.
Yep, get an accountant and a lawyer. It’s a cost you might not be able to afford, but you also can’t afford not to.
My husband started his own business two years ago, with a business partner. They contracted with a lawyer to help them draw up the LLC papers and such and for general planning - I believe this ran about $500 or so. It was incredibly worth it, for piece of mind (they know everything’s written and filed correctly) and for the business (he guided them through things they might not have thought of otherwise).
He also consulted with an accountant to get their QuickBooks up and running - this was some thing like $300, and again, so worth the money as she could get them going much, much faster than figuring it out themselves. She does our taxes (and his business partner’s too, I think) as well, and has helped us figure out withholdings (he has to pay quarterly, now) and additional tax savings that we wouldn’t have been able to otherwise. It’s so much simpler, and totally worth it, to me.
It doesn’t have to cost much. And getting professional help will go a long way to getting your business be professional, too.
Again thank you very much. My mother is a lawyer but her specialty is in family law, so I think all she could do is help point me towards someone who can help me.
Anytime I need decent basic education on a subject, I check out the Dummies series. I proofread those for a couple of years, and I’d bet that there is a Small Business for Dummies guide. They tend to be easy to handle, inexpensive, and have a lot of good info and resources.
My community has a small business resource center which offers classes for entreprenuers and small biz people. Maybe check with your Chamber of Commerce for something similar?
Good luck with you endeavor. I hope it brings you much satisfaction.
Best,
karol
If she were so inclined, she could probably handle setting up a corporation for you. It’s not that hard. Mostly some forms to complete and file in the right office. In my state, such things are filed with the Secretary of State’s office.
You need to do some homework to decide what form of legal entity you wish to create. Some are more complicated than others, some have different advantages. Corporation, S-Corp, LLC, PLLC, Sole Proprietorship, etc.
You may need/want to obtain a tax id number for the business. The IRS likely has some info online about this somewhere.
You want to think about insurance–liability, health, business stuff–inventory, worker’s comp (may be exempt depending on number of employees in some states) unemployment (same)–will the business own any buildings or vehicles?
